Purchase of a freehold motel property

A purchase of a freehold motel property is a pure property purchase. The added element that makes this purchase different is that they are the subject of a long term motel lease. It is important to utilise a motel expert to deal with this added element as it can be quite complex.

The purchase of a motel property is tied in a large part to the security of tenure under the lease for the motel business.

Reviewing that lease to ensure it represents proper industry standards is important and in this respect we prepare a due diligence/lease report similar to that prepared for someone purchasing the motel business. When purchasing the freehold property, it will be subject to a long term lease and it is fundamental that you understand what your obligations are in relation to that lease.

Other issues that we look at in the purchase of a freehold motel property can include (along with all of the other things that would go into a normal property purchase):-

building issues – as landlord you will retain responsibility for structural matters relating to the motel. It is therefore imperative that you undertake a building inspection to ensure that you are satisfied as to the state of the property.

fire safety – both parties under the lease will generally have some responsibilities in relation to fire safety. Again an inspection will ensure that the motel is currently compliant.

council searches – as with any commercial property purchase, it is important to conduct all the usual council searches to ensure that all planning and building approvals are in place and that the use of the motel is lawful.